Importers annoyed with increase in taxes

KARACHI - The steel importers showed dissatisfaction over the issue of increasing taxes on import of finished steel products and recommended few considerations for steel industry in coming National Steel Policy. While talking to The Nation, All Pakistan Steel Melters Association Chairman Azizur Rehman said that sales tax had been imposed on the import of raw material under the cover of power tariff used in the industry. Last year, the raw material was of US $700 and we have been paying Rs 6 in this regard, now, as the rate of raw material has been reduced to US $ 300 and so we have recommended that the tax should also be reduced to Rs 3. But it is up to the government to consider it to promote the industry. He said that the industry is facing three types of income tax. We are paying tax on imported goods up to 4 per cent, on electricity bills 10 % and for our local purchase, we have been paying 3 %. This is very unjust with the industry; we have recommended the government to merge all these taxes into one single and reasonable amount. It should also be mentioned here that the ship-breaking industry is developing in the country, but at the time when this industry was facing decline, we have helped them out by working with the government to exclude this sector from taxes. Now, this industry is standing by our side to help our industry and steel re-rolling industry to recover from the crisis. Akbar Abdullah of Pakistan Iron and Steel Manufacturing Association said that in current situation, the Pakistan Steel Mill (PSM) is the only beneficial steel industry in Pakistan. All the policies that are being followed by the government to provide relief to the steel industry only go in the support of PSM. This has created the PSM monopoly; we only demand the government to promote import of steel products as well, to meet the local demand. The importers were paying 2 % withholding tax since last 6 months, now this has been increased up to 4 %, which is unjust as we are paying 25 % import duty and 16 % sales tax. The government is taking 4 % withholding tax from commercial importers and 3 % from industrial importers. The Regulatory Duty is also under consideration by the government. Moreover, the government is also taking Import Trade Price (ITP), which is not justified and it can bring government in trouble if challenged in WTO, he concluded. It is pertinent to mention here that the withholding tax has increased cost of production which has been passed on to the consumers, as previously the cost of production was Rs 1,000 per metric ton which is now hiked up to Rs 2000 per metric ton. On the other hand, sources in PSM said that the formation of National Steel policy is just an announcement; there is no ground reality of such policies. We are demanding the expansion of PSM, but it has been pending from the past several years.